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Andrew: All right. Here’s the program.
Andrew:
Hey, everyone. It’s Andrew Warner, founder of Mixergy.com, Home of the Ambitious Upstart. And today I’ve got with me Howard Lindzon. He is the investor and entrepreneur that’s very well known for founding Wall Strip, the witty investment show that ran on the internet, and was sold to CBS. He is also known for starting StockTwits, which he just keeps growing and improving. It’s the community-powered idea and information service for investments. And he’s an investor who’s backed companies like Life-Lock, Bit.ly, and TweetDeck. And one that’s given me a lot of trouble as I’ve done this research, Howard, because there’s just too much. There isn’t an easy narrative of “I launched this company. I built it up. That one failed. I launched a second one. Here we are today. Let’s talk.” So what I thought we would do, Howard, is just go a little bit biographical here, and find out how it all happened, and see what can learn along the way. How do you feel about that?
Interviewee: Sure.
Andrew: OK. So let’s start off with school. Where was that, that I put down the school? Can we start with Arizona State University?
Interviewee: Yeah, I went there. I’m from Toronto. Luckily we had second home, my family and my dad, had a second home in Paradise Valley. So I fell in love with the desert early. And I use to go to games down at ASU, and it was like, “I’m going to school at ASU”. And I didn’t end up going until graduate school. So I went to the MBA program. And what excited me was they had a joint program with the Thunderbird There was an internet session [??] MBA [??]
Andrew: Sorry, it looks like for some reason our connection’s a little bit weak.
Interviewee: OK.
Andrew: Do you happen to have something running in the background, Howard?
Interviewee: [??] Oh, let me just…Like programs?
Andrew: Yeah, especially things that would hog-up bandwidth. Some Twitter programs would, but I know Outlook and i-Tunes are the big hogs for this stuff.
Interviewee: Should I just quit Firefox?
Andrew: Yeah, that’ll help, too.
Interviewee: OK, I just quit Firefox. Is that helping at all?
Andrew: Yeah.
Interviewee: OK.
Andrew: OK.
Interviewee: So I apologize. I’m technologically about ten years behind. So I went to ASU, with the goal of avoiding work as long as I can. And I did a dual masters at Thunderbird.
Andrew: Did we just lose the connection? Because it looks like it might have frozen. No.
Interviewee: No, I’m OK.
Andrew: OK.
Interviewee: I’m here.
Andrew: OK. You know what? Actually I’d like to go back a little bit further because we are seeing you invest in, and be a part of, so many different businesses. Did you always do this? Were you always the kid who was starting the lemonade stand, and at the same time, running another business on the side selling candy? Was that you? Or what were you like back then? Where did this start?
Interviewee: Well, I think it started, I was a very priviledged, lucky kid, because I didn’t have to work. But yes, from an early age, I was fascinated by, maybe because I was exposed to so many places and so many things, [??]. So when we went to New Mexico, I was fascinated by turquoise jewelry. And I just started buying it. And you know, friends were buying jewelry from me. I just figured out that nobody went to New Mexico back in like the early 70s. And so when I brought it back, I brought it back with the intention of, you know, marking it up and making money off turquoise jewelry. And all our friends’ mothers wore turquoise jewelry.
Andrew: [Laughs]
Interviewee: So I always stuff going on. Not because I cared about money, just because I had a taste for like buying stuff that nobody else had. And it just turned into all these little businesses that I ran.
Andrew: How old were you at the time, when you were selling turquoise jewelry to all your friends’ mothers?
Interviewee: Probably ten.
Andrew: So at ten you were already starting this stuff.
Interviewee: Yeah.
Andrew: What about the…
Interviewee: And…
Andrew: Go ahead. Uh-huh.
Interviewee: But I had the, I was too big to fail. I didn’t have any inventory risk…
Interviewee: [05:00] But I was too big to fail. Like I didn’t have any inventory risk. Cause my Dad was buying the stuff. So if it didn’t work out. I think he supported the fact that I was, I was thinking about business. So if he invested three hundred, four hundred dollars in, you know, eighty, eighty, eighty pieces of jewelery, that it wasn’t the end of the world. At least he was doing something that supported me, you know, thinking about business.
Andrew: [05:22] You know, I also had a family that supported my entrepreneurial instincts. And a lot of my friends didn’t. And I feel like they were robbed of that opportunity to explore that part of themselves. What do you think? How much of an influence did it have on you?
Interviewee: [05:41] I can’t. I mean, it had a heavy influence, right? I mean, the environment, you know. It just has a heavy influence.
Andrew: [05:46] Beyond buying your inventory, what else did they do to encourage this?
Interviewee: 05:52] It’s a good question. Encourage it? I wouldn’t say they encouraged it. They didn’t say. Oh. My God. He has a knack for it. Let’s see what’s hot on the shelves. Let’s go to China. And see what we could buy. I just think they thought it was interesting. And they just supported it. They didn’t say you can’t sell jewelery to, you know, your, your friend’s Mom. I mean, that’s just not right. They just. Cause it wasn’t not right. It was just interesting and strange that Howard was buying tuorquoise jewelery for ten dollars and selling it for fourteen dollars.
Andrew: [06:24] I see.
Interviewee: [06:25] To go buy candy at the Wiz, which is what I did.
Andrew: [06:30] All right.
Interviewee: [06:31] I supported my early candy habits with tuorquoise.
Andrew: [06:33] All right. So, then, what was the first business as an adult?
Interviewee: [06:39] As an adult? I’m not an adult, even now. So I don’t even know. As an adult, my first business. And it was my. The greatest business of all time was a company called Pro [inaudible] a call. I’ve got it. Hang on.
Andrew: [06:54] OK. [inaudible] these things for telling him about the echo. I fixed it.
Interviewee: [07:00] They made a product called the, the Grip, which is right here, which is a tension-wrapped, birdseed, wrapped-around balloon. And so I called [inaudible] the founder. I was right out of school. Cause I started an article about him. And I said. I love this product. I, you know. I went down to meet him. And I wrote him a check. And I think he immediately went and paid his [inaudible] with that check. So, now, I was his partner. So that’s how I got started in that business. It’s still around today. I think, during its peak, sold about forty million units, and it. And it was in the QVC Hall of Fame, still, like from. It just sold. You know, back then, [inaudible] worked on QVC. They kept it on all day. So Mark is still a really good friend of mine. And that was probably my first investment slash business, but it. It was very. It was really was my first out of college. And it was a [inaudible].
Andrew: [07:59] How? How much money did you put into it to take a piece of that business?
Interviewee: [08:04] I think twenty-five grand.
Andrew: [08:06] Why didn’t you, Howard, say to yourself? I have one of these things? I know where to get birdseeds? I know how to put this thing together? I’ll go and sell it myself? I don’t need him? And I don’t need to, to own a piece of this business? I’ll own a hundred percent of my own business?
Interviewee: [08:20] Yeah. That’s not the way I’m wired. I think obviously [inaudible] is wrong [inaudible]. So, but, then again, I don’t know where Mark, you know, only. It’s like. It’s like a [inaudible] a pitcher that [inaudible]. Only the pitcher knows if you meant to throw at him. But [inaudible] works [inaudible] in terms of [inaudible] your own spin on it, you know. Stock [inaudible], we didn’t invent anything, AIM, and ICQ. And instant messaging has been around a lot longer than Twitter.
Twitter’s twist on everything is the one-to-many feature, you know, the publicness of it. Stock [inaudible] took a risk. So people would really be willing to share one to many, right? AIM is still a very popular way to communicate among hedge funds, you know, one-to-one, or one-to-ten, or chat. [inaudible] so [inaudible] on it was. Let’s, you know, create something unique around Twitter that allows people that love stocks to talk about. So, with the Grip, I never thought like. Oh. My God. It could be better. I was just like. This is a great product. I [inaudible] knock this thing off, and re-engineer it. My skill is in selling and past. You know, when I see something I like, I’m just gonna run forward with it, not think about how many ways I can kind of, you know, not say screw the owner, but do it better myself.
Andrew: [09:46] OK. I’d like to spend just a little more time on this. Because I think it is giving me insight into the way that you work. And it explains why you’ve invested in so many businesses, instead of just focusing on one. Beyond giving him the twenty five thousand dollars, what else were you going to add to the business?
Andrew: Beyond giving him the 25,000 dollars. What else were you going to add to the business?
Interviewee: That’s the question, right? Every mistake investment I’ve made I’ve gone into business with people who are-
Andrew: Sorry Howard it looks like we’ve got a bad connection here. It just keeps skipping. Icy in the audience is saying it sounds like you’re in his neighborhood, and he’s inviting you to his office for connectivity. But I don’t think that’s the issue, thank you Icy.
Interviewee: I’m sorry. I don’t see a problem on our end.
Andrew: Okay.
Interviewee: I apologize.
Andrew: It might be mine. Let’s pick it up and see if we can go with it. If it does keep going like this I will ask you for a rescheduleÖ Or maybe we can find some other solution. I want to make sure people can understand what you’re saying if you are spending all of this time with me.
Interviewee: Yeah. This is just my normal connection so I don’t know.
Andrew: Okay.
Interviewee: So we were talking about…
Andrew: Beyond the 25,000, what was your vision for adding to the business. Changing it. Improving it.
Interviewee: It was really a sales. It was just and energy thing. I was in my mid to late 20s and I just visualized all these markets for this product. Selling them at fitness shops around town in Phoenix and Tampe. And I was like, there is a computer market an agronomic. And there just all kinds of markets for this product. I think as in any product whether it’s The Grip, Twitter, StockTwits or anything that kind of catches on it’s generally something you don’t see that changes the product. Winning companies are magical other than the very few that right away catch on. For The Grip what was magical were our costumers had a cool name The Grip but I want to put my own company name on that. So we were like that’s a really good idea. What do we care what it’s call? So we put Fred’s Fitness on them. Now you didn’t have to have receivables. If Fred was going to put his name on the product he had to pay it up front. Because we made them just for him. So out of that was born our business and we discovered the Ad. Specialty business which really created a sales force of 10,000 people for our product and we just caught on in a pet rock kind of way. And the rest is history.
Andrew: Okay, what was the next business after that?
Interviewee: The next business after that was a Hedge fund. I had been lucky enough with Mark my partner were we just had silly money in the sense that AOL would order 100,000 squeeze balls that we would be profitable before we started making them. So when Mark got tired of buying cars during lunch and the stock market was doing very well which I didn’t know that much about. But we started investing in the stock market. And we were quite successful. So I was managing and goofing around with money and in ë98 I formalized it into a Hedge Fund.
Andrew: So why did-
Interviewee: So that was my next business.
Andrew: With the market, when everyone was talking about it. Ok, was this Lindsen Capital Partners, by the way?
Interviewee: Yes
Andrew: Ok. All right, so is the next thing Wall Strip? The next big move?
Interviewee: The next thing (…jumbled audio…)
Andrew: I’m sorry. Can you repeat that? What was the next thing?
Interviewee: The next thing was just to survive.
Andrew: Ok.
Interviewee: Right because, you know, you had the year 2000 and, you know, people were going broke. Luckily for everybody at the time it was a short, steep crash, but through 2004, it was just like survive. So it was very lean years between 2000 and 2004, and I caught a break in 2005. One of the investments in my hedge fund, called Rent.com, was purchased by Ebay for $450 million, and I was one of the first investors, like, back in 2000 – really a dumb investment at the time, but it just turned out to be kind of a home run. and I had become a friend of the CEO over the years, just checking in over the investment, and I got hooked on how you could make money matching customers with inventory on the web. My next hit was finding a golf company that basically was what Rent.com did but for golf tee times. I found a little company in Arizona was doing that, and me and my friends invested $4million. That was a big hit.
Andrew: I see.
Interviewee: We sold that- it was called Golf Now. We sold that to Comcast in 2007.
Andrew: Ok. Actually, I want to go back a little bit and find out where you go money for the hedge fund. Somebody who didn’t have. Well, did you have the connections?
Interviewee: No, I was never a big…it was just you know, my good looks, and you know at the time it was really just friends and family. It was under $10 million. I did not have the breeding to raise $100 million at the time or do that, and hedge funds were very new in ’98. It was just a way to find out trading accounts. I was just using to learn about the market.
Andrew: Someone in the audience is saying, “It sounds like luck.” You just lucked into the fortune. But beyond luck, and we all have a little bit of luck, if we are going to make it. Beyond luck, there had to be more. What helped you get through those tough times, through 2000 – 2004? What helped you hang on until you found Rent.com?
Interviewee: You survive because you have to survive. I mean, I am an employable person. My partner stayed with me through…you get paid, if you run a hedge fund, you get paid for profits. If you don’t have profits, the you living off savings and you’re hoping your clients don’t redeem. My partners just stayed with me while I learned how to invest in a different environment. with golf now, I kind of got my confidence back and I fell in love with private company investing. You know, I was bored with the stock market. I love it, I still do. I just didn’t think that i didn’t want to be staring at computer screens all day. so that is how I decided to change the way I invest.
Andrew: How is this similar or different from being a venture capitalist? If you are putting $4million into a private internet company?
Interviewee: that’s a good point. I’m not really a venture capitalist. It just so happens that of the $4 million, $2 million was friends and partners. I found a venture capitalist to put in the other $2 million. I didn’t even know what a venture capitalist was until I had to find the other $2 million. I had committed to raising $4, and luckily what was a good company so we found a venture capitalist to put in the other $2m. And that is when I started learning about venture capital.
Andrew: Did you think that you wanted to be a venture capitalist for a while and something about them turned you off and made you stay where you were?
Interviewee: No, I think it comes down to training. I’m not professionally trained to build models and invest in businesses that are doing 20 million a year looking to do a hundred million a year. My comfort factor is: I use the product, I love the product. I meet the people, I then love the people–hopefully, and then I am passionate about where their vision is and that I am able to…and I don’t want to be a typical venture capitalist…the last 20 years, had the money, they didn’t want other people in the deal… (garbled ) …
They find a deal, their job is to invest, if the deal needs 10 million dollars, then their job is to invest the 10 million dollars. The way I look at it is, why would I want only one person’s eyes? They way I look at anything-I’d rather, I’m not scared of asking 100 people their opinion, and also getting them included in the deal, which is, my latest, you know holding company called ‘Social Leverage’ which is based around the fact that, you know, there is wisdom in the crowds if you know how to tap the crowds. And I believe I’d rather have 10 smart investors that understand this business than just me. And then asking my ten smart friends for help all the time, I’d rather them be actively involved with me. And so, that’s the way we invest at Social Leverage.
Andrew: I’d like to spend a little bit of time on Social Leverage and find out how that happens. But let’s go back a little bit and talk about the next big business after ‘Golf Now’ was, and maybe you can tell us how you found it and why you wanted to be a part of it.
Interviewee: Well, there’s two. I started Wall Strip. I was fighting with theóso Golf Now started. And the magic of Golf Now was, as compared to most websites, is the first thing customers did was when they came to your website was pull out their credit card and actually bought something that had a margin in it: the tee time. So, when I invested, I was, social media was just starting, and I went to a couple of conferences and I was fascinated with the fact of ‘Oh my God, web video and like Linked In and, you know, we should be, we are news and aggregation..’ So, I would go to the board and I would say, ‘Well, this is really dumb. We have like all these people transacting and then they go away. Why shouldn’t we have news, and video and instruction. Why shouldn’t we do it right? They come here first, and they do the transaction and it takes them to another area where they have a golf social network.’
But nobody wanted to do it and, so I figured, ‘I’m just going to go do it myself and start a video show about an industry.’ But I wasn’t going to do golf because it wasn’t really my core understanding. So we created a financial show kind of just to prove a point to the golf guys that we could create value out of a social community. And so the idea was to create like a three minute show about a company in a positive way and air it once a day. That’s how ‘Wall Strip’ was born. Just out of a kind of frustration that with what was a successful investment did not want to experiment in the social media space.
Andrew: Why a video show? Why not a social networking site or a chat board or something else? I thought investors don’t like content businesses because they often need to be a hit business. Especially something like a daily video show. Why did you latch onto that?
Interviewee: (garbled) I wouldn’t recommend…I don’t invest in them and I don’t recommend anybody go do it. I just, I wanted to do…(garbled)….a project . You know I had all these, you grew up, like late ’98, Jim Cramer , you know, flashes onto your screen. I was instantly.. I thought the world had changed. Right? Like the web, at least for finance, had changed. There had been the Motley Fool, which never interested me. But when you saw Jim writing passionately in real time, you know, as close to real time as possible, you were connected with that. And so, flash forward to 2005, I thought there was very little innovation. You had all these new tools and it was so bad– financial television I hated so much that I said, ‘Why don’t we create like a Saturday Night Live meets a financial show?’ And lucky for me, I hit up a few investors that thought it was a good idea. So, you know, it really wasn’t a great idea, but I think the investors just passionately believed that I was going to pull something off…
Interviewee: …and I’ll pull something off, and I got the funding.
Andrew: You know, it was a fun show. It was so engaging. It just kept moving. And you wanted to see what was going to happen next, and what was going to be said next. So it was a well-produced show, great content. But there are a lot of well-produced shows with great content. Why did yours stand out? Why did yours become such a big hit that everyone was talking about?
Interviewee: Well, I think what’s a big fallacy is that we were a big hit. It goes to the argument of perception and reality. What was a big hit was the fact that who was watching our show counted a lot more than how many were watching our show.
Andrew: I see.
Interviewee: So I think influence is hundreds more than to have a show where 60 people matter [??] Wall Strip was watched by the right people, for enough time, that people wanted a piece of that. People just felt, you know, we just attracted the right crowd.
Andrew: I see.
Interviewee: So it wasn’t better produced. I would never call it a hit. I think it was good evergreen, smart, funny, optimistic video, which you know, Oprah versus, you know, doing a video Oprah versus Montel Williams. Right? I’d rather do a show that’s kind of like bright and funny, than mean and nasty. But we were right place, right time. The video was like right there. I was fascinated by video. I’ve made a bunch of other investments in the video space since then. And what I had seen when I did my research was nobody was really doing anything cool. And I felt that if I did a cool financial show, there was like 50 companies that would buy us. So I also felt that if we could execute it, that there was a ton of possibilities to get out. And you know that proved correct.
Andrew: OK. Somebody in the audience here, David Lee, is saying, “Andrew, can you ask more about GolfNow, and how he leveraged, or copied, the Rent.com model?” That’s a good question. You see that Rent.com works. A lot of other people from the sidelines saw that it worked. How do you make that leap? And what ideas do you take to GolfNow.com?
Interviewee: Well, I mean I was talking to Scott Ingraham, who is the CEO of Rent.com, and he was teaching me a few things. But you know, I live in Arizona. You know, I love golf. The golf industry has made many rich people poor because it’s kind of like owning a bar. It’s like a really bad business to operate. But there is one thing that matters. Rent.com took, you know, landlords are passionate about getting rid of inventory. You know any apartment that goes unrented, you know, that’s cash flow. That’s money out of their pocket. Well, amplify that times 100 with golf. Any tee time that’s not used can never be gotten back again. You know every eight minutes, they say milk goes bad. Can you imagine if milk went bad every eight minutes? You know, people either wouldn’t drink milk, or they’d be, you know, milk would be flying off the shelves. So the same thing with the tee time. You know it’s in the courses’ best interests with fixed costs to move as many tee times, because once that eight minutes goes by, they’ll never get that back again. And the internet allowed you to crowd source a community, like a city, over tee times, as they were expiring. And you know, it was kind of like price. You know you get the price right, and get as many people on your golf course. And so it was just a really simple idea.
Andrew: OK. Do you see other businesses like that? Other areas where, other markets where milk is going bad every eight minutes, where there’s an opportunity to take this model? What are you seeing?
Interviewee: Yeah, so, I’m an investor in a company called, right after that I invested in a company called Limos.com,…
Andrew: Limos.com, all right.
Interviewee: …which was the largest [??]. The owner was an older guy, and he was tired. And he wasn’t really running it the right way. And he was like one of the largest lead gen engines for limos. And so he had the first part figured out. Right? People were coming to Limos.com. And he was sending them to a lead. But we’ve taken it further, the management, and turned it into like a booking engine. You know, think of an industry more fragmented than limos. You can’t. Everybody owns their own business. He’s trying to fill up his limo. So the more he can do to market himself somewhere, or she, the limo driver, and the more we can do to attract limo people with limo needs to our site, is a match-making service. So the best businesses, whether it’s Google or the NASDAQ, or Rent.com…
Interviewee: …whether it’s Google, or the NASDAQ, or Rent.com, is matching buyers and sellers. I mean in any exchange, it’s the best business you can be in. And you take a fee. So Golfnow.com, Rent.com, Limos.com, you’re turning them into exchanges. That’s why Match.com, eHarmony, they’re in the match-making business, buyers and sellers. And you know, the CME, the ICE exchange, NASDAQ, you know if you catch those right, those are great businesses to be in.
Andrew: Are there other exchanges that haven’t been built out, where you see an opportunity, and you’re scratching your head wondering why an entrepreneur hasn’t jumped on them?
Interviewee: No, I’m not that smart. I prefer to wait until I see one half-baked, or someone with the vision to actually have, I’d just, “Look, I’ve got like four hairs left.” So I don’t risk inventing anything. You know, what I do is I know what I like when I see it. I’m not an artist, per se, but I’m more, I can recognize a good artist when I see one. And you know, if they can get me excited, talk to me. If they say I think I can add value to you, then I’m going to figure out a way to get in the deal.
Andrew: OK. And when we talked earlier about Limos.com, Andrew S.G. in the audience said that the name was a huge bonus to their success. And yeah, I can imagine. Good name for the website.
Interviewee: Yeah, I think that, you know, it’s not like he had bought that name from this guy back like ’98. So I mean he had ten years under his, you know. And we bought it from [??] ’06, ’07, he paid me to buy that company. It was a real company that we had to go buy. But we just saw the untapped potential of that domain name. Yes.
Andrew: OK. Before we get to Social Leverage, which you launched in 2009, maybe we can talk a little bit about StockTwits, which you launched in 2008. Why did you launch that, considering, as you said, you’re not the artist? You’re the person who can spot the business that somebody else is running, and invest in that. And that who, for the most part, you have been. Why did you decide to launch this on your own? Instead of waiting for someone else.
Interviewee: I didn’t launch it on my own. I wrote blog posts in [??] shares and Twitter [??] friends…
Andrew: Howard, I’m sorry, the connection broke. It’s been pretty bad, but we’re picking up on the content here. You’re saying, Fred Wilson, who had an investment in Twitter, and that’s where we lost you.
Interviewee: Fred Wilson was going to make his first California investment, and invest in Twitter. And he had offered me a small amount to [??] product, and at the time all that I would do is tweet about where I was going to the bathroom. I was kind of making fun of the product because I didn’t really understand it. And so I said, when I heard the valuation, I said, “Fred, you are crazy. I mean we’re friends, but I’m not investing in Twitter.” And that was well under, you know, it was let’s just call it 20 million dollar valuation. So if you think back to 2007, you know companies. You probably hadn’t heard of Twitter. Very few people had heard of Twitter. And I said, “You know, I’m using the product, but I see no purpose for the product.” But I wrote a blog post saying if you could do this for stocks, then I’m all in. And Fred said, “Well, why don’t you go do that?” And I said, “Well, OK, I’m going to do that.” And so I wrote a blog post. And Soren, who’s my co-founder, commented on my blog saying, “OK, I’ll build it.” Because I wasn’t, I really didn’t want to do it. But in my community, Soren stepped up, and said, “I’ll build it.” And so we went 50/50, and he built it. And that’s where we’re at today.
Andrew: I see. And when you envisioned it, did you envision it as something that was going to be a layer on top of Twitter?
Interviewee: At first, yeah, because I’m lazy. And I’m not going to go like build something. But Soren, Soren just, I got lucky. Soren, it could have been a crazy guy commenting on my blog, but you know, Soren had been commenting for a long time. I trusted him. You know, it was not going to lose. If he didn’t know how to build it, I wasn’t going to do it myself anyways. So you know, that’s how things get started. Serendipitously, a lot of the time, but it’s not luck. I mean I wrote the post. I enlisted the help. I think, you know, I throw around the word “luck” a lot, but I think viewers need to understand that you make your own luck. It’s about all you have to recognize something’s going to happen. But yes, I do have luck. But you also have to kind of be in the game, for good things to happen. And, go ahead.
Andrew: I was going to say, what was your contribution. I can see that Soren was going to build it out, based on your vision, but beyond being the idea guy, what were you going to contribute?
Interviewee: Oh, we’re still working on that.
Andrew: [Laughs] But seriously.
Interviewee: I mean my contribution was, I have to
Andrew: Were you putting in money? Were you going to be the marketing guy? Were you going to enlist certain people….
Andrew: Öcertain people and get them to start off so that the community would grow. Did you have a vision for that?
Interviewee: Yeah, I mean when you’re as old as I am, it’s all about, painting the picture right? You’ve got the canvas, then you’ve got to get the brushes, and then if you’re 44 like me, I don’t have time to like, worry about 5% equity or 10% equity, I’m about speed. And I’m about winning. So, you know whether I have 30% of the company or 20% of the company at the end, I’m 44 I could die tomorrow. I prefer to eat carbs, and eggs, so I want to move fast. And so by moving fast, you make decisions, and my decision was, I’d rather live with less equity to get this idea, to market very quickly. And so we brought in the right investors, I put together the right team of people, to make sure Soring could do everything, that he needed (inaudible) here’s the things I need. And I said I’ll go deliver those things you need you build a product, and I’ll go be the bandleader of this thing, and here we are today honestly that’s how it works.
Andrew: I see, you know you said earlier that Fred Wilson invited you to invest in Twitter, why, why did he invite you to invest in the business?
Interviewee: I think because he’s smart. I think because Fred is a revolutionary in the way he looks at venture capital investing. I think Fred doesn’t look at about greed, and how much is for me, I think Fred likes to win. I think that’s the attitude that you should have and that you want entrepreneurs that want to win, they don’t look at dollars and cents every second, and what’s in it for me. I think it’s easier to spot people that realize, okay, so we’re going to elect this eleventh guy in, but he adds so much value, that, yeah I know it’s a pain in the ass to do extra paperwork for a guy that only going to put twenty-five grand in, but he’s gonna be a great spokesman for the brand. And so, funny that I turned it down and then Fred’s next call I think was to Jeff Pulver, whose a friend mine, and that bastard just made a lot of money off of that. So whenever I see Jeff I go, ‘dude, what about a split?’ But, he earned it, he put up the money, and he’s gonna make the money.
Andrew: Okay then let’s talk about social leverage, what was the vision there?
Interviewee: The vision there is that I feel that the world of financial leverage, I never was a part of it. I never was, I never bought into it, meaning I never really made the money I probably could of, but I never had to do the deleveraging that other people had to. So I just don’t like the, I think that leverage, is a term that was overÖit became a strategy, not a tactic. And I think, you know, the biggest mistake that everybody made especially in Phoenix where I live is, leverage became like ‘well of course, you take leverage.’ I mean I buy gas, I shouldn’t pay for it, I buy a house, why would I put any money down? So it works on the way up, but really, as I learned, in managing stocks, is leverage is a tool, meaning when the markets really good you can step on the leverage and add 20% leverage, but, you have to bring that back down, because I’m reporting to my (inaudible) you know what I mean? Like I’m reporting Ö(inaudible)Örecorder Ö (inaudible)Ötactic not a complete strategyÖ(inaudible)Öyou got paid. Can you not hear?
Andrew: It picked up, we disconnected for a little bit but we’re back, we’re good.
Interviewee: Sorry, so for 25 years, financial leverage just worked, so it became like, it became like a right not a privilege. And I believe that social leverage, will replace financial leverage, in the sense that, what you put in, is your heart and your soul and you build like what you’re doing by doing interviews for your audience, I mean, it’s not a financially leverageable product, content or networking, but you will be able to call in favors and you don’t know when, but you’re building up all these chips, whereas, excuse me, in financial leverage, there is no chips, you’re just borrowing, borrowing, borrowing, for that one day when someone’s says you gotta collect. It’s just too much pressure and it’s a system that just always leads to bad things.
Andrew: So, you’re investing in companies that have, that help build that social leverage, but you’re alsoÖ.
Interviewee: We are, we are investing in companies, that tap, that have a DNA, that understands that we can build a global brand, without much financials. I mean Bentley, built a global brand on a million dollars. Whether itÖ.
End of transcription.
Interviewee: ÖI mean, listen, we haven’t proved anything really, but it’s exciting to be involved in brands that are tapping this social leverage, which is in day one, and, I want to be, I’m not the guy who invented the real time web, but I feel I understand it and I believe in it, so I want to put my money where my mouth is, and my time.
Andrew: Okay, alright, let’s talk about a couple of people, a couple of, let’s say controversial people, starting with Tim Sykes who introduced us, Tim Sykes is not allowed on Stock Twits, because I guess because of the stocks he trades, because of the way that he aggressively promotes, what’s your relationship with him now? My understanding in the past was that he was just considered a pest in the community, but now he seems to be a friend who can introduce us.
Interviewee: Well, a community is much different than a friend. A community has rules, right? I mean I’m a friend of Tim Sykes and when I spend time with Tim Sykes I know a Tim Sykes that I don’t mind spending time with. But, behind the wall of the internet, Tim Sykes is not someone that I think is funny, or I don’t approve of that, I tell him all the time, I go ‘it’s just not for me.’ And so I think, a community, Yahoo Message boards has no rules, when you have no rules, the lowest common denominator takes over. To me that’s open, but it really is, it’s just, it keeps people away. So our rule at Stock Twits is, we know we invested the money my investors trust me, we want to create a community that we like to hang out in, we don’t have to let you in. We want your in, you’re in to start, everybody’s in, but if you misbehave, we’ll try and warn you but there are rules written all over the site. I don’t understand why people can’t read rules. Tim breaks every rule of our community, therefore is not allowed in our community.
Andrew: Amazing, even as a friend he does it and he does it intentionally my sense is because, if he’s outrageous he gets attention, he talked about that here on mixergy. I’m trying to figure out where I stand on this stuff, like as I get more attention, does it make sense for me to go and be aggressive and fight back with people, so that I get more attention for myself and more viewers and more people to partner up with, or does it make sense to always be the kind of person who I am offline when I’m offline which is, the guy who read, ‘How to win friends and influence people.’ and who we went to work for Dale Carnegie organization years ago.
Interviewee: Oh it’s an easy answer I (inaudible).
Andrew: I’m sorry, let me pause you for a second because you are about to give me the meaning of life here and I’m specifically asking you Howard because, I respect you as a business person and I respect you as a personality and I respect you as somebody whose ideas really stand up and aren’t just put up for show so, that’s why I wanted to wait until the video and the audio caught up before you can answer, and they have.
Interviewee: You pick fights with people that have more traffic than you, that is the meaning of life.
Andrew: People who have more what than you?
Interviewee: Traffic.
Andrew: More traffic, you pick fights with people who have more traffic than you, and you intentionally do it? That’s the truth?
Interviewee: No, no I’m just saying, if you are going to do it, there’s no reason to pick a fight with anybody, why would I, I’m not a fighter, but if I’m gonna pick a fight with somebody and I don’t like a person, better have a lot more traffic than me and what I say to them better engage them in a way that let’s that community know who I am.
Andrew: How do you mean by that? What do you mean by that? How do you do that?
Interviewee: Meaning, I think that Jason Calcanus is a bully. I don’t know him, I don’t care to know him, I just think that his behavior is, is ridiculous. So, I can get under his skin, but by him noticing me, he’s shining his whole traffic on me. Okay, therefore, that adds value to my community because people that know him will come to my site and go ‘Wait a minute, Howard’s like a real funny, smart guy.’ So now they’re back on my community and I just added value on my community. I took people, from his community and put them in my community. I gave them a chance to open their eyes.
Andrew: I see but you’re, you’re saying too that you’re picking a fight in a way that explains what you do and explains who you are, how do you mean that, how do you do that properly? Let’s say, Howard, you and I, I like you, I’ve said that I respect you, but I look at your Twitter followers, you have 200,000 smart people, all business people who are following you, I sit there and I go, ‘I got a few thousand people, I want some of Howard’s people.’ How would I pick a fight with Howard in an intelligent way that draws the people to me?
Interviewee: Oh exactly I don’t know, it’s different for everyone, you’d have to really catch a nerve, right, to engage me, or you’d have to do it really smartÖ
End of transcription.
Interviewee: or you would have to do it, really smart and just say, ‘Hey, man, you know, you’ve got to hang out,’ like I think, the way I became friends with Fred Wilson was not by picking a fight, but was, when I was writing my comments, I didn’t know who Fred was, but I loved his blog. When I was writing my column it was, I was laughing, meaning I knew that when he read them, he would laugh out loud. And, and so you, I didn’t have to be mean to get Fred Wilson’s attention, I just had to give to his community in a way that made him laugh out loud and then he found out who I was. It’s all about content, if your content’s good, people will come, if you’re nasty, so, so my whole point is you’ve got to be really creative and you’ve got to swim outside your comfort area, meaning, you know, this whole one at a time thing is true, it’s very tough. Social leverage model at the beginning is very tough, you’ve got to get fans one at a time, but [tape muddled] they just won’t be engaged in your content. So does that help at all? Is that helpful?
Andrew: It does and it seems to me that this is different than, business and the interactions that we’re watching publicly are different from the way that you’d conduct business when it’s private. It’s showmanship when it’s public on blogs and twitter and comments, in private, if somebody was bothering you, you wouldn’t lose your focus by engaging them,
Interviewee: You can’t.
Andrew: you would focus on your business, right?
Interviewee: You can’t, I mean I get hit all the time with hate, I mean nobody, it’s not pleasant, I have haters, they’re trying to engage and I’ve made mistakes, you know, I,, I, you know as you’re responding to that person that you shouldn’t respond, so nobody’s perfect but I’ve gotten way better at ignoring baited attempts. And you know they’ll keep happening but I’ll get better at just getting thicker skin, and you know just forging ahead. I think you get more, you catch more bees with honey, period, end of story, my content proves it, it’s optimistic, it’s pro business, it’s pro friendship, it’s pro community, the message gets out. Oprah, Oprah’s who you aspire to be, she is wealthy, alright? All the haters that do those TV shows have a, you know, it’s not the life for me, they have an audience and make some money, but I’d rather take the high road on all that stuff, have fun and be positive
Andrew: Every once in awhile it makes sense to go on the attack, at the right person, never. Even if they have a spotlight that they could shine on you and bring their traffic over to you?
Interviewee: Absolutely, if you are going to attack, make sure that that person, is going to engage and that what you said hurts them in a way that makes them engage with you.
Andrew: [laughter] I love this honesty, I’ve got to say it, this is the kind of honesty that even when I was doing Dale Carnegie training, I would tell the instructors, ‘Part of this is disconnected from the real world, there’s a part of the real world that you guys aren’t representing that is true where bosses do yell at their people sometimes,
Interviewee: Right
Andrew: where investors do yell at their portfolio companies and vice versa.’ Okay
Interviewee: I live in that real world. I live in that real world and if you want to interview my employers they’ll be happy to interview you, and tell you that I can be a dick, many times. So,
Andrew: I think they’ve said it publicly, actually.
Interviewee: What’s that?
Andrew: I think they’ve said it publicly, actually, but they always say it in a funny way, like, I forget when I saw a video where people were criticizing you who worked for you, but they said it in a funny way so they get away with it, I imagine.
Interviewee: Yeah, and I was involved in those things, so those are all my ideas.
Andrew: I see.
Interviewee: I want to be, I tell everybody at the company that they should have conference calls without me on them and make fun of me. I mean, I have to be the villain because I’m trying to, to, I want them all to work, if the common enemy is me, then we’re okay. If they’re all fighting amongst themselves, we got a problem. But if I can get them focused that I’m the bad guy then I think we can move forward. So, you know, it’s just a strategy. It’s, you know, I have my flaws, I lose my cool, but I think people understand I that bleed for my companies and I bleed [tape messed up] in the best time doing this. I am into this thing like it’s my passion. So it’s like, you know, the leader of a band, you’ve got to lead the band.
Andrew: Alright, let’s suppose somebody, I want to be fair with your time, we only have about a minute left, Howard, if somebody wants to get you to invest in their business, and I’m not necessarily saying that’s somebody in the audience who’s going to jump from being an audience member to getting invested, but what’s the process for you
Andrew: process with you for getting investments, for investing with a company?
Interviewee: at Howard at Lindson dot com, I cold call people all the time so you can send me a presentation, the shorter the better, it should be a completed product so that visual is very important, I want to be able to click around the website. I don’t invest in ideas, unless they’re my own, I invest in like products that I can touch and feel and like see the website and see the vision, so you know, it needs to be a clear, concise pitch around a finished product. It may have only one user, but it’s something that I can understand right away.
Andrew: Okay, alright, so you’ve given out your email address and if IC, or Daniel or I can’t pronounce that name has an idea, they now know where to reach you with a finished product. Alright, and if anyone sees your twitter stream and sees that you’ve got a big follower and a follower account and they want to pick a fight with you, what’s a good fight to pick with you? Where’s the weak point?
Interviewee: My weak point is probably my hairline.
Andrew: Alright, I expect to see twenty tweets, twenty attempts to get a fight going with Howard about his hairline. And I say Howard, not mine, I’m very confident with my own hairline. Thank you for doing this interview with me Howard, it’s good to meet you and thank
Interviewee: Yes, thank you.
Andrew: and thank you all for watching and staying all the way to the end despite the technical problems. The people who stay all the way to the end, Howard, these are the monsters, these are the guys who are so freakin’ outrageously ambitious, that even though they know that they can go find a billion other things to watch and listen to, they’re listening to us with all these issues and I’m so glad that we’re able to give them value and be open with them, especially about what it takes to fight and sometimes go outside of the norms, outside of what you learned in school, to build a business. Howard thank you and everyone, I’ll see you in the comments.
Interviewee: See you.
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[Thank you investor, penny stock blogger, founder of Investimonials and StockTwits pariah Timothy Sykes for introducing me to Howard.]
